Global Earnings | HSBC reports flat first-quarter profit; expects further credit loss

HSBC Holdings reported flat first-quarter profit on Tuesday on rising charges brought about by higher credit loss in the UK and provisions for Middle East conflict, saying it expects further credit loss for the year ‌as the ⁠outlook ⁠worsens.

Europe's largest bank posted pretax profit of $9.4 billion for January-March, versus $9.5 billion a year earlier and the $9.59 billion average of broker estimates compiled by HSBC.

Expected credit loss surged by $400 million to $1.3 billion, due to the impact of the U.S.-Israel war with Iran as the economic outlook deteriorated, as well as a $400 million ⁠charge for a ‌single exposure at its UK investment bank.


HSBC revised its credit charge for 2026 to 45 basis ⁠points (bps) of average gross loans, from 40 bps, citing "ongoing uncertainty in the outlook".

The bank described its loss in Britain as coming from "fraud related secondary securitisation exposure with a financial sponsor in the UK".

The lender did not identify the company involved. HSBC said it has a total of $3 billion in exposure to such securitisation financing, which it described as ‌lending backed by portfolios of receivables such as mortgages, consumer loans and auto loans.

Rival Standard Chartered last week booked a $190 million credit charge ⁠due to cautious scenario planning, along with Lloyds Banking Group's $204 million and Deutsche Bank's $90 million provision in the same quarter.

HSBC and StanChart, which have both bet on increasing Middle East trade with Asia and beyond to fuel growth, are two of the global banks most exposed to the war, according to company data and sector analysts.